Page 17 - Policy Economic Report - October 2024

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

This year, 190 gigawatts (GW) of non-fossil power capacity, primarily wind and solar, have already been
added across China, India and Brazil, the GEM report highlighted. This surge contrasts sharply with the 72
GW of fossil fuel power scheduled to come online in the BRICS countries in 2024. By year’s end, the BRICS
nations will have approximately 2,289 GW of renewable energy capacity compared to 2,245 GW from
fossil fuels. For comparison, the European Union reached this 50 per cent renewable energy share in the
early 2010s, while the G7 achieved parity only last year.

The BRICS countries are also accelerating their renewable energy development. Wind and utility-scale
solar projects under construction or in planning stages now total 1,550 GW — more than double the
capacity of fossil fuel projects in the pipeline. When factoring in hydropower, the ratio of renewable
projects to fossil fuel projects in development nears three to one.

This rapid development means BRICS nations are on track to nearly triple their renewable energy capacity
by 2030, aligning with the global goal set at 28th Conference of Parties or COP28 to the United Nations
Framework Convention on Climate Change to triple renewables and keep global warming within the 1.5
degrees Celsius limit. If the current growth in renewables continues, the BRICS bloc could see its total
renewable energy capacity increase by more than 2.5 times by the decade’s end.

Despite the progress, fossil fuels are not disappearing entirely from the BRICS energy mix. Every member
nation, except Ethiopia, still has active coal, oil, or gas projects in development. If completed, these
projects would expand coal capacity by 36 per cent and oil and gas capacity by 53 per cent. This ongoing
investment in fossil fuels presents a challenge to the clean energy transition, as it risks undermining the
substantial gains made in renewable energy development.

6. Indian Economy

India’s economic growth

According to RBI, real GDP growth is expected at 7.2 per cent in 2024-25 with 7.0 per cent in Q2; 7.4 per
cent both in Q3 and Q4.

For 2025-26, assuming a normal monsoon and no major exogenous or policy shocks, real GDP growth is
estimated at 7.1 per cent, with Q1 at 7.3 per cent, Q2 at 7.2 per cent, Q3 and Q4 both at 7.0 per cent.

The growth is attributed to robust government capex and revival in private investment; improved
prospects of agricultural sector due to favorable monsoon rainfall; strengthening manufacturing and
services sector activity sustained by strong domestic demand; retreating global and domestic inflation.

However, despite the above growth momentum, challenges stand in terms of escalation in geopolitical
tensions; volatility in international financial markets and geoeconomic fragmentation; deceleration in
global demand; along with supply chain disruptions.

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